Supply chain law turns tempers up – bureaucratic monster or pioneering work?

Berlin, December 29 – The new supply chain law is sparking heated debate ahead of its introduction in January. Federal Labor Minister Hubertus Heil defended the law against corporate criticism. It is designed in such a way that companies can implement it well, the SPD politician said on Thursday. This is why it only applies to companies with 3,000 or more employees in the first year. “In addition, we have made reporting obligations even more user-friendly so that companies can properly and efficiently meet their legal requirements.” The chairman of the Federal Association for Wholesale, Foreign Trade and Services (BGA), Dirk Jandura, mentioned the so-called Supply Chain Due Diligence Act (LkSG) in the conversation a “bureaucratic monster” with the Reuters news agency.

It came at the wrong time and was “a disaster”, Jandura said. It could also have an inflationary effect because it restricts trade. The family entrepreneurs also criticize the LkSG: “Anyone who constantly imposes new reporting obligations on companies in the fight against energy prices and supply chain problems, such as with the Supply Chain Due Diligence Act. should not be surprised if the economy sees the disadvantages of localization more and more”, warns Reinhold von Eben-Worlée, president of the association “The Family Entrepreneurs”.

The law comes into force on January 1, 2023 and requires large companies to take action against human rights violations and environmental harm at their suppliers. According to the Federal Minister for Economic Cooperation and Development, Svenja Schulze (SPD), Germany is doing pioneering work for a fairer globalization: “In developing countries, people often do not have the opportunity to assert their rights against international companies and their suppliers.

According to the federal government, the LkSG is the world’s first comprehensive legal regulation on corporate due diligence for respecting human rights and protecting environmental concerns. Accordingly, companies must put in place effective risk management in order to identify, avoid or minimize the dangers of human rights violations and certain types of damage to the environment. The law defines the necessary preventive and corrective measures in your own field of activity and throughout your supply chains and obliges you to put in place a complaints procedure and regular reports. It initially applies to German companies with at least 3,000 employees, and from 2024 also to companies with 1,000 or more employees.

Supply chain law turns tempers up – bureaucratic monster or pioneering work?

Source: Reuters

Symbolic photo: Image by Markus Kammermann on Pixabay

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